“This was a very positive outcome for us as we are aiming to expand and modernise our services.

“The $1.24 million referred to is not a cash largesse from the government, but it represents a commitment to subsidise the 20 beds when they are operational.

“Italian Aged Care will outlay a lot of money before the Government committed subsidy becomes available to us.”

Mr Roberts said the allocations were welcome given only 200 additional beds were allocated in WA out of 597 applications.

“We will have two additional beds operational from July 1, 2016, but the other 18 will be part of a new development that we plan to build,” he said.

“This will also allow for the decommission of our 33-year-old nursing home area which has another 43 beds; so a total of minimum 61 beds for the new development, likely more, and hopefully operational in late 2018.

“The average cost of developing a new aged care facility is on average between $200,000 and $250,000 per bedroom (where all bedrooms are single bedrooms with en-suite facilities).”

Mr Roberts said the Federal care subsidy would go towards the cost of providing care, including direct employee expenses; medical consumables; and for external health professionals such as podiatrists, speech pathologists and dieticians.

At this stage, Mr Roberts said Italian Aged Care was fundraising to cover the development building costs and did not want potential benefactors to think it had received $1.24 million.

Voicing concerns that the cost of providing care to an ageing population was being underestimated, he said the 2016-17 Budget had also resulted in cuts to the care subsidies since the places were allocated.

“We have estimated that the effect for us may be in the region of as much as $900,000 over three years,” he said.

“In fact, that $1.24 million now looks more like $1.14 million as average care subsidies will be reduced.”